Money habits and attitudes start young. And while most parents understand the importance of discussing saving and money with their children, many also feel daunted or unprepared to teach the right lessons – and begin those all-important conversations.
Saving is our thing – we want to enable everyone to save with confidence, from little kids to adults. So, we set out to learn how parents are teaching their children about saving, and helping them develop a healthy life-long relationship with money.
Tips for little kids – under 5s
Too young? While many parents we asked felt you can’t really teach toddlers to save, research suggests most 3-year-olds are intelligent enough to grasp important concepts like saving up and delayed gratification.
Make money a game
My friend has a 3-year-old and plays shop with her a lot. They have a toy cash register which even has a wooden card machine. They then talk about how money is spent in really basic terms.
Teach through stories
There are many great books that educate children about money and saving. I have one that I loved when I was a kid and now read with my 4-year-old. Gently introducing saving through stories is a lovely way to start them talking and thinking about important concepts.
Give them some responsibility
Alex (5) gets £1 a week pocket money. If he wants something big, he writes it down and should he manage to save half the total, we add the rest. It doesn’t always work, but he’s had a £15 digger this way – and he was so excited to buy it with his ‘own’ money!
Tips for young kids – ages 6-12
From around six, you can start to step up their education. The parents we spoke to had lots of practical ways to help their young kids understand saving.
Teach through stories
Teach the idea of earning
We use a marble system with our two boys (6&8). They get a set number a week as pocket money, doing homework and for good feedback from school. They can also earn additional marbles for jobs around the house.
Each marble’s worth 50p, and eventually they add them up and decide what to spend the money on (once we convert to real money). In the past, they’ve been able to buy video games and large building block sets.
Save it before they can spend it
My boy (9) saves at least half his birthday and Christmas money, and some of his weekly allowance. We find paying it into his savings account helps. He can see it on screen but tends to leave it alone, as it’s not like cash burning a hole in his pocket.
He says he’s saving up for a car when he’s older (though he panicked slightly when I told him how much they cost!)
Discuss the power of saving
I want my 7-year-old child to understand money doesn’t just happen, so she does little jobs to earn money and has a ‘pot’ (held by me) that she can spend on what she wants. By retaining control of the pot, it means we can have conversations around thinking before buying and understanding that saving more means more opportunities.
Tips for teenagers – ages 12-16
Teenagers need some financial independence. For this stage, it’s about teaching how saving fits into a broader understanding of personal finances – one that includes spending, income and budgeting.
Teach real-life budgeting
Like most kids I’d guess, mine seemed to think money grew on trees. One Saturday, I took my son (15) through my payslip and card statements to show where everything went. He felt the gross figure (before tax) was a lot, but when he saw how many deductions there were for tax, National Insurance and pension he was shocked – and that was before I reminded him about utility bills, grocery shopping, council tax, mortgage and everything else! I now jokingly ask him to lend me a fiver!
Encourage their entrepreneurial spirit
I always thought my daughter (16) wasted money on fashion, but she’s started selling old clothes online – and seems to be doing well from it. She showed me the listings and I was impressed by her photos and descriptions. I’ve suggested she should save some of the money she earns, which she has!
I really want my daughter (14) to understand how money works, so I’ve made it a priority to explain everything I know. This includes reining in spending, building an emergency fund, and setting longer-term saving goals. Time will tell if she’s taken my lessons on board.
Saving with NS&I
If you’re feeling inspired to teach your child about saving, why not start by opening an NS&I account for them? Then, you can watch their savings grow together.
Already saving with us?
Use Premium Bonds to spark conversations
The monthly Premium Bonds prize draw is loved by adults and children alike. It also provides a great money moment, bringing the whole family together and creating an opportunity to discuss the importance of saving and savings. You can buy Premium Bonds for kids under 16 and add to them from £25.